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Keysight Stock Rises 113.2% in the Past Year: How to Play the Stock
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Key Takeaways
KEYS gained 113.2% in the past year, outperforming the Zacks Computer & Technology sector and S&P 500.
KEYS is benefiting from AI data centers, advanced networking, wireless, defense and chip investments.
KEYS generated higher free cash flow, held $2.41B cash, and saw 2026 and 2027 estimates improve.
Keysight Technologies, Inc. (KEYS - Free Report) shares have gained 113.2% in the past year compared with the industry’s growth of 122.7%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.
Image Source: Zacks Investment Research
The company has underperformed its peers like Viavi Solutions, Inc. (VIAV - Free Report) and Advantest (ATEYY - Free Report) . Shares of Viavi have jumped 430.1%, and shares of Advantest have risen 221.2%.
KEYS Rides on Strong Demand Across Multiple Sectors
Keysight is benefiting from strong demand across AI data centers, next-generation networking, aerospace & defense modernization and emerging wireless technologies. As AI clusters become increasingly complex, customers are investing heavily in interoperability testing, system validation and production testing solutions. Keysight is benefiting from demand for solutions supporting GPUs, CPUs, DPUs, switches, NICs, PCIe, Ethernet and UALink architectures.
The company also saw strong adoption of ultra-high-density interconnect solutions. It is seeing accelerating momentum in its wireline business due to expanding AI infrastructure deployments. The industry is transitioning from 800G deployments toward 1.6-terabit and future 3.2-terabit architectures, creating significant opportunities for testing and validation solutions.
Aerospace, defense and government remained a key contributor. Management cited momentum led by Europe and continued strength in the Americas, with demand centered on radar and electromagnetic spectrum operations and new wins for radar target generation solutions. Management stated that automotive and energy orders rose for the third consecutive quarter as the business stabilized, driven by software-defined vehicle programs, cybersecurity, and EV charging solutions. These markets support a multi-year pipeline beyond any single spending cycle.
It is also benefiting from customer investments in advanced node, memory and silicon photonics, while expanding software and services. KEYS cited key wafer test solution wins supporting silicon photonics and advanced node programs across Asia, the United States and Europe.
In general electronics, management highlighted ongoing AI-related innovation and capacity investment for high-performance PCBs, where increasing density interconnects and higher speeds are raising test intensity. In the second quarter of fiscal 2026, software and services represented about 36% of revenues, and annual recurring revenues were 27% of the total mix. This mix shift, combined with system-level emulation offerings such as AI workload emulation and the launch of Keysight AI Inference Builder, can support longer-duration engagements and margin leverage. Such diverse business model, robust portfolio strength give it an edge against its peers such as Viavi, Advantest and Camtek.
Cash Generation and Capital Flexibility are Positives
Keysight continues to demonstrate strong cash-generating capabilities, providing the company with significant financial flexibility. During the first six months of fiscal 2026, operating cash flow increased to $942 million from $862 million in the prior-year period, while free cash flow rose to $879 million from $803 million. The robust cash generation enabled Keysight to strengthen its liquidity position.
As of April 30, 2026, cash and cash equivalents were $2.41 billion, and long-term debt was $1.83 billion, with $699 million in the current portion of long-term debt. Keysight repurchased about 780,000 shares in the quarter for $220 million. As of the second quarter of fiscal 2026, its current ratio stands at 1.9.
Estimate Revision Trend
The company’s earnings estimates for 2026 and 2027 have improved over the past 60 days.
Image Source: Zacks Investment Research
Key Valuation Metric of KEYS
From a valuation standpoint, KEYS is currently trading at a discount compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 32.86 forward earnings, lower than 38.42 for the industry but above its mean of 27.92.
Image Source: Zacks Investment Research
End Note
Strong demand from AI data centers, semiconductor, wireless and defense markets. Growing investments in advanced networking and chip technologies are also supporting the top-line growth. Efficient working capital management and healthy cash generation are positive factors. A current ratio higher than unity suggests the company is well-positioned to pay its short-term debt obligations. Upward estimate revision underscores management’s bullish outlook on the stock’s long-term growth potential. Hence, with a Zacks Rank #1 (Strong Buy), KEYS appears to be a healthy investment option at this moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Keysight Stock Rises 113.2% in the Past Year: How to Play the Stock
Key Takeaways
Keysight Technologies, Inc. (KEYS - Free Report) shares have gained 113.2% in the past year compared with the industry’s growth of 122.7%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.
Image Source: Zacks Investment Research
The company has underperformed its peers like Viavi Solutions, Inc. (VIAV - Free Report) and Advantest (ATEYY - Free Report) . Shares of Viavi have jumped 430.1%, and shares of Advantest have risen 221.2%.
KEYS Rides on Strong Demand Across Multiple Sectors
Keysight is benefiting from strong demand across AI data centers, next-generation networking, aerospace & defense modernization and emerging wireless technologies. As AI clusters become increasingly complex, customers are investing heavily in interoperability testing, system validation and production testing solutions. Keysight is benefiting from demand for solutions supporting GPUs, CPUs, DPUs, switches, NICs, PCIe, Ethernet and UALink architectures.
The company also saw strong adoption of ultra-high-density interconnect solutions. It is seeing accelerating momentum in its wireline business due to expanding AI infrastructure deployments. The industry is transitioning from 800G deployments toward 1.6-terabit and future 3.2-terabit architectures, creating significant opportunities for testing and validation solutions.
Aerospace, defense and government remained a key contributor. Management cited momentum led by Europe and continued strength in the Americas, with demand centered on radar and electromagnetic spectrum operations and new wins for radar target generation solutions. Management stated that automotive and energy orders rose for the third consecutive quarter as the business stabilized, driven by software-defined vehicle programs, cybersecurity, and EV charging solutions. These markets support a multi-year pipeline beyond any single spending cycle.
It is also benefiting from customer investments in advanced node, memory and silicon photonics, while expanding software and services. KEYS cited key wafer test solution wins supporting silicon photonics and advanced node programs across Asia, the United States and Europe.
In general electronics, management highlighted ongoing AI-related innovation and capacity investment for high-performance PCBs, where increasing density interconnects and higher speeds are raising test intensity. In the second quarter of fiscal 2026, software and services represented about 36% of revenues, and annual recurring revenues were 27% of the total mix. This mix shift, combined with system-level emulation offerings such as AI workload emulation and the launch of Keysight AI Inference Builder, can support longer-duration engagements and margin leverage. Such diverse business model, robust portfolio strength give it an edge against its peers such as Viavi, Advantest and Camtek.
Cash Generation and Capital Flexibility are Positives
Keysight continues to demonstrate strong cash-generating capabilities, providing the company with significant financial flexibility. During the first six months of fiscal 2026, operating cash flow increased to $942 million from $862 million in the prior-year period, while free cash flow rose to $879 million from $803 million. The robust cash generation enabled Keysight to strengthen its liquidity position.
As of April 30, 2026, cash and cash equivalents were $2.41 billion, and long-term debt was $1.83 billion, with $699 million in the current portion of long-term debt. Keysight repurchased about 780,000 shares in the quarter for $220 million. As of the second quarter of fiscal 2026, its current ratio stands at 1.9.
Estimate Revision Trend
The company’s earnings estimates for 2026 and 2027 have improved over the past 60 days.
Image Source: Zacks Investment Research
Key Valuation Metric of KEYS
From a valuation standpoint, KEYS is currently trading at a discount compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 32.86 forward earnings, lower than 38.42 for the industry but above its mean of 27.92.
Image Source: Zacks Investment Research
End Note
Strong demand from AI data centers, semiconductor, wireless and defense markets. Growing investments in advanced networking and chip technologies are also supporting the top-line growth. Efficient working capital management and healthy cash generation are positive factors. A current ratio higher than unity suggests the company is well-positioned to pay its short-term debt obligations. Upward estimate revision underscores management’s bullish outlook on the stock’s long-term growth potential. Hence, with a Zacks Rank #1 (Strong Buy), KEYS appears to be a healthy investment option at this moment. You can see the complete list of today’s Zacks #1 Rank stocks here.